Etsy is laying off around 220 employees, or nearly 12 per cent of its workforce, as the online marketplace restructures its organisation to speed up decision-making and execution. The layoffs, announced alongside the company’s second-quarter earnings, will primarily affect employees in the product and engineering teams.
The move marks one of the first major organisational changes under CEO Kruti Patel Goyal, who took over earlier this year. In a message to employees, Goyal said the restructuring is intended to build an organisation better suited for the company’s next phase of growth.
According to the company, the workforce reduction is not a cost-cutting exercise but part of a broader effort to simplify its organisational structure and improve execution in an increasingly competitive e-commerce market.
Reportedly, an Etsy spokesperson also clarified that the layoffs are not linked to the adoption of artificial intelligence.
The restructuring comes as Etsy continues to sharpen its focus on its core handmade and artisanal marketplace while competing with major e-commerce players such as Amazon, Walmart, TikTok Shop and Temu. The company has also been investing in improving product discovery and search capabilities to enhance the customer experience.
Despite the layoffs, Etsy reported stronger-than-expected financial results for the second quarter. Revenue reached $668.3 million, exceeding analysts’ estimates, while sales on its core marketplace increased by 9.3 per cent. The company also raised its full-year gross merchandise sales (GMS) forecast, signalling confidence in business growth.
However, Etsy continues to face challenges in expanding its buyer base. Active buyers declined slightly year-on-year to 87 million, although the number of sellers on the platform increased to 5.7 million.
The latest workforce reduction reflects Etsy’s efforts to realign its organisation as it seeks to accelerate growth while navigating a highly-competitive retail landscape.
